This article argues that the Economic Adjustment Programmes (EAPs) that came with loans to peripheral Eurozone members Greece, Ireland, Portugal, and now Cyprus, are very similar to the loans with conditionality, also known as Structural Adjustment Programs, that international financial institutions used as a policy tool in the 1980s and 1990s. It defines structural adjustment programs and then shows how Eurozone rules plus the EAPs resemble them. It then canvasses the literature evaluating structural adjustment in the developing world in order to formulate expectations for its performance in Europe. The conclusions from the large literature on structural adjustment policies suggest that the EAPs will: be badly implemented; be neutral or bad for growth; be bad for equity and the poor; have unpredictable policy consequences; and will allow incumbent elites to preserve their positions. Preliminary evidence from the four peripheral countries confirms that the same problems are afflicting EAPs.
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